Loans from Commercial Banks

Q.

What Are the Disadvantages of Commercial Banks?

Q.

What Is a Commercial Bank and What Are Its Functions?

Q.

What are the disadvantages of chain stores?

Q.

Explain trade credit and factoring as a source of finance for a business enterprise.

Q.

Explain the issue process of GDR.

Q.

A commercial bank is a financial institution which performs the functions of accepting deposits from the general public and giving loans for investment with the aim of earning profits.

1. True

2. False

Q.

Explain the secondary functions of commercial banks.

Q.

A loan from a bank is a ____________ source of finance as the loan amount can be increased according to business needs.

1. Rigid

2. Permanent

3. Temporary

4. Flexible

Q.

Discuss the types of services offered by ‘Factoring’? Discuss its two merits and one limitation.

Q.

Write the functions of commercial banks.

Q.

A detailed investigation of the company is done in regard to the company affairs while taking a loan from commercial banks.

1. True

2. False

Q.

Is Borrowed funds an asset?

Q.

Commercial banks occupy a vital position as they provide funds for different_____________ as well as different time periods.

1. None of the above

2. Functions

3. Divisions

4. Purposes

Q.

Because of festive season Bhuvan Garments received double orders. Advice the company the various sources of finance, which can be used to raise necessary finance for this purpose.

Q.

As per your understanding, state what is the lending of funds?

Q.

If one borrows from a commercial bank, secrecy of business can be maintained as the information supplied to the bank by the bank is not kept confidential.

1. True

2. False

Q.

The Basic Goal Of Financial Management Is______

Q. A foreign company Zylo Ltd. wants to collect money from the capital market of India. The finance manager of the company, Mr. Robert wants to issue a financial instrument which instead of being in dollars shall be dominated in rupees.One characteristics of this financial instrument is that it can be listed in any Indian stock exchange. Identify the financial instrument.

Q. Commercial paper is an unsecured _________ note issued by the firm to raise funds for a short-term period.

1. Promissory
2. Debit
3. Credit
4. Sales

Q.

Explain the functions of commercial banks.

Q. Formalities such as issue of prospectus and underwriting are not required for raising loans from a bank.

1. True
2. False

Q. ___Banks advance money to the business firms for their short and long term requirements.

Q. Loans from banks is a flexible source of finance.

1. False
2. True

Q. Which of these conditions is needed for a financial institution to become a bank?

1. Accepting deposits
2. Advancing Loans
3. Both (a) and (b)
4. Neither (a) nor (b)

Q. What is meant by marshalling of assests and liability

Q. The costliest of long-term sources of finance is __________________.

1. Preference share capital
2. Retained earnings
3. Equity share capital
4. Debentures
5. Capital raised through private placement.

Q.

Which of the following fall under the short-term funds?

1. Trade credit, Factoring, Banks, and Commercial Paper

2. Trade credit, Factoring, Equity shares and Retained Earnings

3. Trade credit, Commercial Paper, Preference shares and Retained Earnings

4. Trade credit, Factoring, Equity shares and Preference shares

Q. ___funds are raised by the company through borrowings or loans.

Q. ___is a letter from a bank which guarantees that a buyer will make payment to the seller on time and in correct amount.

Q. ___ provides timely assistance to business by providing funds as and when needed by firms.